All of a sudden, Britain is overrun by Japanese artists and entertainers. As part of a year-long festival of Japanese culture – one of the biggest of countless events, worldwide, in which one nation hawks its heritage around another, Japan’s actors, martial artists, masseurs, dancers, puppeteers, flower-arrangers, tea-makers, calligraphers and musicians are bringing performances and installations to venues all over the country.
Ten years ago, when Japan last put on such a show in Britain, the event was upbeat: a proud nation demonstrating that it could do more than build efficient factories for the production of reliable cars and gadgets. But now, after a decade of recession in Japan, the jollity feels forced. It’s like watching a businessman, desperately worried about his mortgage, dress in bright colours and go out juggling for spare change.
‘The fact is Japan desperately needs investment from overseas. The Nikkei today is roughly two-thirds down from its peak in 1990. Japanese banks carry bad loans estimated at about Y30,000bn (Pounds 168bn); and Kiichi Miyazawa, the outgoing finance minister, recently said government finances were “approaching a state of collapse’.
Junichiro Koizumi, the new prime minister, has affirmed his willingness to reform the economy even at the cost of plunging Japan into greater short-term difficulty. Many measures at the top of the agenda will lie designed, at least partly, to facilitate foreign investment.
Even without government help, many Japanese companies are attracting money from abroad. It has been observed that the companies in best shape are also the ones with listings overseas, and with English web pages presumably because the internet, where English is the lingua franca, has become a key source of information for investors. And it is not just money that Japanese companies seek from abroad: another prized commodity is expertise. At Chugai, one of Japan’s biggest drug manufacturers. (Osamu Nagayama, the chief executive, recently established a mechanism for taking advice formally from foreigners: an international advisory board of senior executives from global pharmaceutical companies.
The involvement of foreigners has been a humbling experience. When Yamaichi Securities was taken over by Merrill Lynch in 1998, national pride took a huge blow – as it did when Renault seized control of Nissan the following year. More disturbing still has been the fate of Mitsubishi Motors, now 37.3 per cent owned by Daimler Chrysler. As part of its restructuring the company has been obliged to remove 60 well-paid consultants (former executives) from its board, and to) recall more than 2.5m defective cars because tens of thousands of customer complaints had been systematically concealed.
The differences between the working practices of two nations are not merely formal. Corporate culture reflects closely the outlook and values of every worker. If you change the culture, you may eventually change the individuals. But to disregard the differences can be catastrophic. In Japanese Business etiquette. a manual for Americans doing business in Japan, foreigners are earnestly warned against criticising ,Japanese workers in front of others; such profound loss of face, the author contends, could provoke the worker to commit suicide or murder.
Less drastic, but equally susceptible to misunderstanding, is the business meeting. In Japan, it is polite to attend meetings in force: this shows devotion to a business relationship. But to westerners, filling the room with people who know little about the issues under discussion seems absurdly wasteful.
Likewise, Americans and Europeans use meetings to thrash out points of difference, whereas Japanese are less focused on specific objectives, and carefully avoid conflict.
These subtle differences – crying out to be resolved, at some point, by one side abandoning its approach – can cause immense frustration.
“We have people fly in for a meeting,” complains one Australian based in Tokyo, “and afterwards we realise that nothing was agreed. ‘They (the Japanese counterparts) only say yes because they don’t want to argue with you.”
Language itself can be a problem. The Japanese can find it difficult to speak frankly in their own tongue, which is heavily veiled in courtesies and ellipses. Even simple questions can lead to obscurity because, instead of answering “yes” or “no” and then supplying an explanation, the Japanese do it the other way round. (And even then, a direct “no”, seeming rude, would usually be avoided.)
To avoid such problems, Carlos Ghosn, put in charge of Nissan by Renault, formally instituted English as the language in key meetings and documents. It is easy to imagine how such a step along with the recent suggestion, from the Commission on Japan’s Goals in the 21st Century, that English be established as Japan’s official second language has dented Japanese self-confidence.
Kentaro Kogi is one young Japanese who feels unhappy speaking his own language. Working as a journalist at the Diamond Weekly, Kogi frequently interviews bankers more than twice his age, and feels acutely conscious of his low status. “I’m too polite,” be says, lowering his voice to avoid disturbing the people sitting nearby. “If I was speaking Japanese now I would sit up like this”—he uncrosses his legs and shuffles backwards in his seat. To minimise the sense of inferiority, Kogi who, despite shaving his head and dressing soberly, looks young for his age constantly strives to use a “not too polite” word. “The interesting thing is that I don’t feel like that when I speak English,” be says
One type of meeting particularly unsuited to Japanese humility is the focus group. Sudeep Gohill, who works at the Tokyo office of advertising agency Bartle Bugle Hegarty, says it is practically impossible to get participants to express strong views. And if one person does manage to deliver an opinion, the others invariably express agreement.
To get round this, the facilitators who run groups often ask participants to write down their opinions and then read them out eliminating any hint of calculated contradiction. But the results remain less than ideal.
Does this matter? Historically, Japan has coped pretty well without focus groups. But some western companies, says Gohill, sipping coffee in an outpost of Starbucks, consider focus groups an intrinsic part of business routine. If these companies are to do business in Japan, it seems, the Japanese must embrace focus groups.
The shift towards US and European practices is gradually altering the mind-set of individual Japanese.
Consider, for instance, remuneration. Should employees be rewarded by seniority according to Japanese tradition or by merit? Studies show a constant decline in support for reward based on seniority. But support for merit-based remuneration is far from clear. According to the Dentsu Institute of Human Studies – a research subsidiary of the advertising agency more than 40 per cent of respondents decline to support either option.
That ambivalence, says DIHS’s Seiko Yamazaki, reflects young people’s sympathy for the older generation, which has struggled to come to terms with the idea that a job is no longer for life. Workers in their 40s and 50s, brought up to regard self-promotion as boastful, have also been trained as generalists. In both respects, they are ill-suited to finding new employment.
In job centres, says Yamazaki, when asked what kind of work they have been doing, these middle-aged salarymen typically respond by saying they have been working as a manager. ”’they can’t explain their expertise, they can’t say what their skill was,” she says. “Instead, they talk about their job title.” Younger workers, knowing better than to expect lifelong employment within a single organisation, have become increasingly conscious of their status as individuals. They look for jobs that will give them specialist skills and other advantages when they next look for work, says Toru Hatano, a partner at Accenture, which specialises in human resources.
Inevitably, this increases competition between employees to levels previously unseen in Japan. “Relatively speaking,” says Hatano mournfully, “it does seem true that there will be more selfishness.”
Closely related to the new emphasis on individual achievement is the growing respect for entrepreneurs. Until recently, individuals in business enjoyed none of the cult status of their western counterparts. Even today, when I ask bankers, advertising executives and management consultants to name the Japanese equivalent of Bill Gates or Richard Branson, they seem unable to do so.
Several, after a moment of reflection, refer to the founder of Softbank but without managing to name him. Others suggest Akio Morita, the founder of Sony, which is interesting: it is difficult to imagine Americans naming, as an icon of entrepreneurship, a man who died two years previously, aged 78.
But the climate is changing and, though it’s still considered remarkable, a few ambitious individuals are daring to leave the security of employment to strike out alone.
Yasumichi Oka, for instance, quit his job as creative director at Dentsu, to establish his own ad agency, Tugboat, two years ago. “That had never happened before,” be says. “No one quits Dentsu.” He was prompted to make the move after being sent by Dentsu to the UK to learn how British agencies work; in London he was encouraged to set up on his own. Since then, Tugboat has enjoyed great success, winning awards for its work for clients such as Suntory, Xerox, Sega and Japan Railways.
Shizuka Kamei, a leading figure in the Liberal Democratic party, regrets the western influence on Japanese corporate culture. Japan’s innovations and industrial practice, he recently observed, were once revered. “Then we started copying the US and by doing that we have lost our active spirit.”
As this suggests, the pressure for change is not driven entirely by foreign investors. It also comes from Japanese women, who find it difficult to establish a career in traditional companies. Yoshie Kitagawa, for instance, who runs a predominantly female equities team at ABN Amro in Tokyo, says she could not do that at most Japanese banks. (In his first action as prime minister, Koizumi seemed to address this issue by appointing five women to the cabinet, including the foreign minister.) Then there is the influence of those who have tasted life outside Japan -people such as Ken Miura, a young designer at Sony, whose first big challenge was to present a prototype of the Vaio, a combined laptop and camcorder, to the company’s chief executive.
In traditional organisations, staff address their superiors by surname-plus-title, and in many such organisations, they speak only to an immediate superior. At the westernised Sony which has been listed on the New York Stock Exchange since 1970 Miura directly addressed the chief executive Norio Ohga as Ohga-san: polite, but not particularly deferential. His friends, working elsewhere, find it amazing that Sony gives young employees such licence.
Japan’s demographics present an equally compelling argument for reform. The population is shrinking the fertility rate stands at 1.39 babies per woman—and individual Japanese live extremely long lives. In years to come, a huge proportion of the population will be in retirement. For their livelihoods they will depend on young people, of whom about l0m are unemployed because Japanese companies, wedded to the prerogatives of seniority, have chosen not to lay off established employees and have cut recruitment instead.
From each of these groups, the pressure is rising. Add to that the influence of anonymous global markets, and of individual executives such as Nissan’s Brazilian-born boss Ghosn, and fundamental reforms seem inevitable.
But it is worth reflecting on the cost of those changes to the Japanese way of work. Boastful Japanese entrepreneurs, if they appear in large numbers, will take a lot of getting used to. And we must prepare ourselves for the possibility that the Japanese as a whole, through constant exposure to English, will acquire the alarmingly direct habit of answering questions with a yes or no, and only then supplying an explanation. But good manners, even if they are less suited to the exigencies of business in one country than another, should not necessarily be levelled. Over the years, native English speakers have reduced “I thank you” and “If you please” to “thanks” and “please”. To be utterly reductive, we might as well have got rid of them altogether. But we chose not to, and it would be regrettable if the Japanese were compelled to eliminate their own elaborate code of behaviour – a more impressive cultural artefact, arguably, than any of the works on show across the UK.
2041 words. First published 5 May 01. © The Financial Times